Dealing with execs who equate IT and typewriters

Dear Bob …

I am the IT manager for a small company (125 employees, IT staff 5 including me, 125 workstations, four servers).  Our annual revenue is about $135 Million.

Although I don’t have a lot of IT experience (just computer basics, the most I can do is set up a small network with server/clients), I have a great team of technicians. We coordinate together almost on a daily basis, sometimes they propose ideas, sometimes I tell them of a problem we have on the business end, and we all look for an IT solution.

My question:  The CEO and CFO see computers almost like glorified typewriters. Meaning, they see computers as a necessary evil for our operations. Every cent I spend for IT resources turns into a battle to get approval. The CEO and CFO are not cheapskates at all; we are quite profitable and those areas which they see value (entertainment, decoration, business trips, salary, bonuses, etc.), they tend to spend with no hassle. Just with IT they seem to undervalue its impact; therefore, they approve my budgets only after a lot of lobbying on my part.

Any suggestions?

Thanks,

Stuck in the Sand with No Budget

Dear Stuck …

I’m handicapped just a bit by not knowing the business culture in your company, or the personalities of your CEO and CFO. So filter this advice and make adjustments based on how things are done. With that in mind:

First of all, it isn’t all that surprising that your CEO and CFO don’t recognize the value of IT. From the sound of things, they’re both more outwardly focused – on business opportunities – than inwardly, on organizational effectiveness. If this guess is on target, it means they spend most of their time looking at exactly where IT has the least impact. This doesn’t make your task impossible. It does mean you’ll have to first hit them with a board (metaphorically, of course) to forceably redirect their attention to where you live and breathe.

I’d start by putting a formal presentation together. Go through the steps even if their style is such that you can’t actually present it to them. It will help you put your own thoughts in order. Here’s what it should cover:

1. Establish the importance of effective execution. It might seem odd, but this isn’t always obvious to entrepreneurs, especially those who are good at selling. Many figure that their job is to sell the deal, and so long as they do, everyone else will figure out how to make it happen. The dialog here is along the lines of sales being about making promises, and execution is about keeping them. Also make the point that the better the company is at executing, the more revenue the company gets to keep because costs will be lower and risks will be reduced. (Somewhere in here, apologize for stating the obvious – tell them you’re just setting the stage.)

2. Make a list of the most important business functions – sales, accounting, inventory, fulfillment … I don’t know your business, but you do. Make this a three-column table. The first identifies the function. The second states the impact of IT going away on that function (minor inconvenience; costs increases moderately, costs increase dramatically, function slows to a crawl, function becomes impossible, and so forth). The third suggests how much future opportunity there is from further investment in IT – for example dramatic reductions in cost; significant mitigation of current risks; incremental improvements in cycle time and throughput.

3. Lay out the basic categories of IT spending: Keeping the lights on (infrastructure and software maintenance); creation of new value (application development, integration and enhancement, support for business expansion) and IT architecture (investments in using proper engineering instead of duct tape and chewing gum). When you present, make it clear that investing in solid IT architecture is just as important as the other two categories of expenditure, but much harder to explain … but if they’re willing to listen, you and your staff are more than willing to take the time that will be necessary. (Most of the executives with whom I’ve had this discussion recognize the implied threat, and plead for mercy instead.)

Now you’re ready to meet. You’ll have to decide whether a formal presentation is best, or an informal discussion. Either way, have printed copies of the table described in item 2 with you. Have a printed agenda, unless you think they’d react badly to it. Ask for an hour of their time. Tell them what you told me – that you have a strong impression that they don’t recognize the value IT brings to the business and the importance of investing in it properly.

Then walk them through your logic. Have whatever discussion you need to have. At the end, let them know what you hope will come out of the meeting – that its purpose is to provide a better context for all future discussions about investments in information technology, and your goal is for the company to make the best decisions possible.

Then, carry through. Every time the situation calls for it, refer back to this discussion. Just say, “Remember when we talked about …? This is an example of what I was trying to explain.”

It’s never going to be perfect, but with repetition it should become easier.

– Bob